Ima Cuisine is in Auckland's central city. Photo / RNZ
By Finn Blackwell of RNZ
An Auckland business owner fears her restaurant will not survive if the council increases rates to plug its $325 million budget hole.
It was revealed at a council workshop on Wednesday that severe weather and rising inflation-related costs had meant the original budget hole had deepened.
Now, the city faced the very real possibility of rates rising alongside sweeping cuts to council services.
It was a possibility that many Aucklanders did not want.
Fixing the budget’s shortfall with rates alone could lead to a whopping 22.5 per cent increase in average rates.
And it would not just be homeowners bearing the brunt.
Businesses were facing serious challenges on top of the struggles borne from the Covid-19 pandemic.
Ima Cuisine in the central city was just one restaurant that would have to contend with a potential rates increase. Owner Yael Shochat said the future for her business was unclear.
“I really don’t know what the future looks like, I don’t know if I will survive, if how many people will survive, I don’t know what sort of business survives,” Shochat said.
For her, a potential rates increase meant higher rent for her restaurant.
“I really only want to survive, I’ve given up on being a money-making business a long time ago. I’m just a service, I’m a service for the community.”
Shochat said the council needed to lend more of a hand to help local businesses survive.
“They need to decide that they want us to succeed, I actually think hospitality needs a bit of a break. The CBD is suffering and I think it’s important to keep it going”.
The council had already asked Aucklanders about cost-cutting to keep a rates hike at just under 5 per cent.
It was not yet clear how much bigger the bill would have to be.
Auckland Business Chamber chief executive Simon Bridges reckoned he had at least one of the answers - sell the council’s 18 per cent share in Auckland Airport.
“The truth of the matter is, Aucklanders, especially ratepayers but more generally, have very limited appetite out on the streets to increase rates or debts,” Bridges said.
He likened the council’s position on the airport to a family holding on to shares when it could not pay its mortgage.
Plenty of Aucklanders could agree with him, more than half the 44,000 people who made submissions on budget spending cuts wanted at least some of the shares sold.
Bridges said the council needed to act fast in deciding how to plug its budget hole.
“There’s some time for councillors, non-elected officials throughout the organisations associated with the council, but the clock is ticking,” Bridges said.
He said staff from all across the council needed to put their heads together to find effective solutions.
“This is not just something for the mayor and councillors,” he said.
“Non-elected officials throughout the organisations should also be offering up areas of realistic savings, plans about what they can do to elevate some of the pressure on the ever-growing budget hole, the growing debt and interest.”
Auckland councillor Shane Henderson said that was exactly what they were trying to do.
“There’s no magic money tree out there, people are doing it really tough, and businesses are doing it really tough, but at the same time we do need to respect that the feedback we received was; people want to save the services that council are providing,” he said.
“We’ve got to figure out how to pay for it, there’s no easy answers here, but we’ll certainly be trying our best to look at it from every angle.”
The final annual budget will be adopted on June 29, taking effect from July 1.
- RNZ
Volumes were lighter as investors are thinking more about the summer holidays.